This article explores explore the relationships among socio-demographics, perceived health, and happiness in a patient population of 221 adults recruited from 39 primary care practices in Alabama. We also explored whether the relationship between socio-demographics and happiness is mediated by perceived health. The dependent variable, happiness, was dichotomized as happy versus unhappy. Independent variables or correlates of happiness included race (Black or White), age (< 65 vs. 65 and older), gender (male vs. female), perceived income (sufficient vs. insufficient to meet basic needs), health literacy (adequate vs. inadequate), and self-rated health (excellent/very good/good vs. poor/fair). Data were analyzed using generalized linear latent and mixed models to examine the relationship between happiness and its correlates. Our findings suggest that adequate health literacy and better perceived health are associated with an increase in the likelihood of happiness. In addition, the relationship between perceived sufficient income and happiness is mediated by perceived health; whereas, individuals with sufficient income are more likely to have better perceived health, and as a result more likely to be happy. Other individual factors, such as gender, age, and race were not significantly associated with being happy or having higher perceived health in any of the models. Results suggest that policies aimed at increasing health literacy, promoting health, and reducing income disparities may be associated with greater happiness.